An investment that is relatively new to the secondary market, in the financial services sector, is known as the EB-5 Immigrant Investor Program. The EB-5 Program was created by Congress in 1990. It is administered by the United States Citizenship and Immigration Services (“USCIS”) in an effort to fuel the U.S. economy through the creation of jobs. This is accomplished by allowing investments by foreign investors, which in turn gives the foreign investors the ability to become a U.S. citizen.
Foreign investors may qualify for EB-5 visas (legal U.S. citizenship) by investing $500,000 to $1,000,000 in a new domestically based business in the United States through regional centers designated by USCIS. The primary focus is the creation and preservation of jobs in the United States. As such, the investment must create or preserve at least 10 full-time jobs for workers in the U.S. within two years of the foreign investor’s admission to the United States.
The “business” of the investment must include a “for-profit” activity as long as it is conducting and operating a legal enterprise and can include the following entities:
- Limited or General Partnership
- Holding Company
- Joint Venture
- LLC or other Corporation
- A public or private business trust or other entity
These investments, for the foreign investor, have a finite life period to hold before citizenship is granted. Once the investor receives citizenship, often they will elect to sell their investment. The underlying business is generally not impacted, negatively or positively, by the choice for the initial investor to liquidate.